Politics

Premier: Taxation system needs mending

• Publication Date：05/12/2010
• Source： Commercial Times

The present administration will work to create a fairer society by establishing a more equitable taxation system, Premier Wu Den-yih said May 11.

Speaking during a conference organized by the Central Personnel Administration, Wu noted that the gap separating the rich from the poor has been increasing in recent years.

To reverse this trend, the taxation system should be reformed so that the wealthier members of society are asked to pay more in taxes.

This can be done in several ways, the premier noted—by changing the capital gains tax laws, for instance. “At the moment, many people buy houses not to live in, but as investment properties,” the premier noted.

“We need to figure out a way so that those who profit from these investments are required to pay more in capital gains taxes than they currently do,” he added.

The National Health Insurance System is another area in which the wealthy should be required to pay more. At the moment, premiums payment requirements are based solely on income from wages, the premier noted.

But many wealthy people derive their income not from wages but from investments. Thus there is a perception among the public that the NHI is not fair, because the rich are not required to pay a proportional share.

Even if the changes to the NHI currently being debated are unable to address this problem, an alternative way should be found so that the wealthy contribute more to the country through capital gains taxes, Wu noted.

Finally, the government will try to crack down on tax delinquents. According to an amendment passed in March 2007, the government has a time limit of 15 years to pursue tax delinquents. The same amendment also stated that the government had only five years to pursue those who owed back taxes since before the amendment was enacted.

This means that if delinquent taxpayers from before 2007 can hold out for another few years—until 2012—their taxes will be automatically written off, Wu noted.

Such a solution is not acceptable, especially since many of these taxpayers are extremely wealthy and owe the government vast sums of money. The present administration will work together with the Legislative Yuan to ensure that pre-2007 taxpayers will have to pay back whatever taxes they owe, Wu promised.

In related news, President Ma Ying-jeou also noted yesterday that the government will work hard to crack down on tax evaders. It will also reform the tax structure, and work to spur economic growth as a way to increase tax revenues, Ma said. (HZW)